How unequal is Britain today, historically speaking?

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6 December
11:48
December
2016

It’s terribly unequal. Britain is by far the most unequal country in Europe – in fact, only America rivals us in the entire world – and right now, in times of income inequality, we are back to the levels of some time in the early 1930s. In terms of wealth inequality, we are actually more unequal than that now.

It really is quite a statistic. It means that Britain in the 21st century has the same level of inequality that it did in an era when the main working-class jobs for men were in the mines and agricultural labour, and for women was being a servant. We are as unequal as a period of servants, of top hats, and of people wearing different clothes according to their social class. The difference is that by the 1930s, wealth inequality was reducing. That’s not the case right now.

Historically, the height of inequality in the UK to date was in 1913, just before the First World War. Before the war, there was a belief in Britain that the people at the top of society deserved to be there, and deserved to have servants, and deserved what they had, because they were different. After the war, there was a change in the national mood to “Normal people deserve a decent life” and “It is wrong to be greedy”.

So, inequality fell dramatically from the First World War all the way to the late 1970s. It didn’t really matter which of the two political parties was in power. Lloyd George helped things along, as did the formation of trade unions and a new Labour Party. Inequality was already falling when Labour came to power in 1945 and it continued to do so during their period in charge.

However, inequality also fell during the thirteen years of Tory rule from 1951-64. The Harold Macmillan government built a lot of council housing. It continued to decrease under Harold Wilson in the 1960s and it also fell under Edward Heath. The main reason was that from 1913 right through to the late 1970s, both political parties were moving to the left at every election.

This came to a juddering halt with Margaret Thatcher. She reversed the national sentiment of “It’s wrong to be greedy” and introduced the idea that “Tall flowers should be allowed to bloom” and “If somebody has a lot of money, it’s because they’ve worked hard for it.” Unsurprisingly, inequality rose rapidly under Thatcher, all through the 1980s, although it flattened out a little under John Major.

  • Harry Enfield’s Loadsamoney: Thatcherism reversed Britain’s dislike of greed (for some). 

It also rose under New Labour and Tony Blair. When they came in, salaries in the finance industry were going up and up, while a “normal” job for a working-class person was no longer a relatively well-paid manufacturing job but working in a shop, on a minimum wage. We also had a New Labour government who not only didn’t really want to talk about redistribution, but had come to believe in the trickle-down theory. Blair talked a lot about “equality of opportunity, not equality of outcome” but that really translated to saying “I don’t care if inequality is rife.”

“The inescapable truth is that from 1979 onwards, our two main political parties reversed the trend of the previous 60 years or more and moved judderingly to the right.”

That was partly why, right up until the financial crash of 2008, you saw images of bankers partying in London and buying bottles of Champagne for £40,000. That idea, that if you have a lot of money you flaunt it, has ended now. There are still more than 2,000 bankers earning over €1m a year, but they see ordinary people demanding that Philip Green bails out the BHS pension scheme and they keep as quiet as they can about their money.

Despite this, inequality picked up again when the Cameron and Clegg coalition government came in. The inescapable truth is that from 1979 onwards, our two main political parties reversed the trend of the previous 60 years or more and moved judderingly to the right. We are completely out of step with the rest of Europe – and Brexit can only make that worse.

When it comes to tackling inequality, Angela Merkel may be seen as a right-wing German leader, but she is more to the left than New Labour ever was. Jeremy Corbyn isn’t just a standard issue 1970s or 1980s Labour politician: he’s an absolutely standard mainstream European politician today. In a way, we only see him as strange because we have become so strange.

Will inequality in Britain improve in the near future? So much depends on what kind of Brexit we do. Unfortunately, what often happens in Britain since the 1970s is that when the country becomes poorer, the well-off decide to abandon yet more of the rest of society.

“I’m optimistic that equality will start to get better soon. It has even started hitting the top 10% of earners who go to elite universities and get well-paid jobs in London, who still can’t afford to buy homes.”

The irony is that solving inequality could be terribly easy. All you need to do is take a little bit more from the people right at the top, a tiny amount of their income, and you can double the income of the people at the bottom without the people at the top even noticing it. The reason that Philip Hammond doesn’t hire 2,000 more tax inspectors and start doing this is that the people the government would be targeting would be, well, themselves and their friends. Just look at the job that Theresa May’s husband does [Philip May is a senior executive at an investment fund company that profits from tax avoiding companies].

Even so, I’m cautiously optimistic that equality will start to get better soon. It has to. The problem is now so bad that it has even started hitting the top 10% of earners – there are people who go to private schools and elite universities and get well-paid jobs in London who still can’t afford to buy homes. These are natural Conservative supporters, and their plight is triggering a survival instinct in the Conservative Party that if it loses people like that, it is in trouble. It will have to do something about inequality if it is to survive – and, for better or worse, the Conservative Party has always been very good at surviving. 

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